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Using a Discount Amortization Table (Straight Line) Panamint Candy Company prepared the following amortization table for $500,000 of five-year, 9.2 percent bonds issued and sold
Using a Discount Amortization Table (Straight Line) Panamint Candy Company prepared the following amortization table for $500,000 of five-year, 9.2 percent bonds issued and sold by Panamint on December 31, 2012, for $471,000 Carrying Value Cash Interest Discount Discount Period Payment Expense on Bonds on Bonds (Credit) (Debit) Payable Payable (Credit) Balance 29,000 6/30/13 $23,000 $25,900 $2,900 26,100 12/31/13 23,000 25,900 2,900 23,200 6/30/14 23,000 25,900 2,900 20,300 12/31/14 23,000 25,900 2,900 17,400 6/30/15 23,000 25,900 2,900 14,500 12/31/15 23,000 25,900 2,900 11,600 6/30/15 23,000 25,900 2,900 8,700 12/31/16 23,000 25,900 2,900 5,800 6/30/17 23,000 25,900 2,900 2,900 12/31/17 23,000 25,900 2,900 0 471,000 473,900 475,800 479,700 482,600 485,500 483,400 491,300 494,200 497,100 500,000 1. Prepare the entry to recognize the sale of the bonds on December 31, 2012. If an amount box does not require an entry, leave it blank. 2012 Dec. 31 Journal Account and Explanation Debit Credit Record issuance of bonds at discount 2. Prepare the entry to recognize the first interest payment on June 30, 2013. If an amount box does not require an entry, leave it blank. 2013 June 30 Record interest expense 3. Determine the interest expense for these bonds that Panamint will report on its 2015 income statement. 4. Indicate how these bonds will appear in Panamint's December 31, 2015, balance sheet. Panamint Candy Company Balance Sheet (partial) For the Year Ended December 31, 2016 Bonds payable
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